$70 Million Philanthropic Donation to Kalamazoo in the Works—Weigh In!

NPQ has written repeatedly about the dangers of private money in public systems in terms of its potential to undercut democratic decision-making. But, some local governments, starved for funds, are less interested in the potential for a Boston Tea Party–type meltdown among the populace and more interested in taking care of what feel like overwhelming immediate problems. In Michigan, where philanthropy got so deeply involved in Detroit, the seeds have already been planted.

The city of Kalamazoo, Michigan recently approached two local philanthropists about their financial struggles—and the philanthropists responded positively. As previously reported in NPQ, local residents William D. Johnston, who chairs a private wealth management company, and retired drug company CEO William Parfet proposed the creation of a foundation to support the city and pledged $70 million over the next three years to help solve many municipal finance issues in Kalamazoo.

The MOU was released earlier this week by the city to set up the proposed Kalamazoo Foundation for Excellence for future decisions. It is not a binding legal document, and city commissioners will have the opportunity to discuss it at their work session scheduled for October 24th. (See the full Memorandum here.)

Under the MOU, the city will create a city-controlled fund to receive the initial donation, which will aid in the creation of the nonprofit foundation by August 31, 2017. Approximately $20 million of the original $70 million will be allocated directly to the 2017 City budget before the foundation is officially formed. The rest of the donation will then go toward developing a budget through 2019 that incorporates a $12 million property tax—a decrease of more than 37 percent from the current rate.

This plan also strives to eliminate the city’s deficit and fund key investments, including allocating $10 million each fiscal year toward “aspirational projects” focused on a variety of improvements, including youth development, poverty reduction, capital investments, and more. It’s not yet outlined publicly as to how these projects will be chosen or who will manage them, but $10 million is a significant amount of money to devote to programs each year in a community of 75,000 people.

Angie Wierzbicki is Executive Director for Cullinan Park Conservancy in the suburbs of Houston, TX. She has been involved in nonprofit leadership roles for almost 10 years, mostly in Texas. Angie has an MS in Recreation, Park and Tourism Administration from Western Illinois University and a BA in Broadcast Journalism from the University of Southern California. In addition to nonprofits, Angie has served in the Peace Corps in Malawi, Africa, and dabbled in retail management.